Uber, the ride-sharing juggernaut that began as a humble startup back in 2011, is having a tough time with their PR strategy as of late. BuzzFeed reported this week that a senior executive at Uber suggested at a private dinner that the company should invest $1 million in a team of opposition researchers to dig up dirt on reporters’ personal lives – particularly on reporters who dish out the bad press.
In their pursuit of building an estimated $30 billion tech company, Uber has garnered both praise and criticism for their win-at-all-costs business tactics. But does fast expansion outweigh the issues caused by bad PR in terms of long-term success? Here we take a look at what startups can take away from Uber, for better or worse:
The same tactics that take you to the top might not help you stay there:
“Disruptive” isn’t a startup buzzword for nothing; in order to get attention, startups often have to carve out their own niche in existing markets that don’t otherwise have a place for them. In its early stages, Uber pushed itself ahead of taxi companies with its political-minded rhetoric; systematic PR attacks on competitors, and strong personality. While these tactics led to a rapid ascendance to the top of their market, they aren’t necessarily sustainable long-term. Startups should be aware that how they run their business in the early stages will determine their company culture and public persona in the future, and consequentially how long they will be able to survive in an ever-changing business environment. When small businesses are aggressive towards incumbent competitors they’re seen as disruptive, but when market-leading companies are aggressive towards smaller competition they’re seen as bullies.
A good relationship with the press is give and take:
The relationship between public relations and journalism can be tenuous, to say the least, but it’s symbiotic – typically there needs to be a give and take to do each other’s job well. Uber hasn’t ever been a complete press darling, but its recent behavior highlights the importance of maintaining a good relationship with the press, even when the press you’re getting isn’t stellar. Uber has set a precedent of non-engagement when it comes to negative press (CEO Travis Kalanick declined to comment on accusations of the company shirking background checks in his GQ profile), but this recent scandal will hopefully be a turning point.
In the company’s first humble move in a while, Uber CEO Kalanick issued a long Twitter apology for his senior vice president’s recent problematic comments. Hopefully, it’s a first sign of the company turning over a new leaf, though only time will tell if Kalanick’s apology will bring about a change in Uber’s behavior. For startups, Uber’s mistakes are a lesson in accountability and transparency (i.e. corporate communications 101). In the face of scandals like those Uber are facing, more than a Twitter apology is necessary to win back the trust of consumers and the good graces of the press – there needs to be tangible progress made in fixing the underlying cultural issues that caused this recent slip of the tongue.
Bad press can overshadow a great product:
Even its biggest critics can’t deny that Uber is changing the way people are using transportation, but a Google news search for Uber today shows pages upon pages of the company’s problems, and their Twitter tag is riddled with users questioning their business practices. Their negative behavior is casting a bad shadow over their well-designed and well-executed product.
Consumers care about your company culture:
Today’s ultra-aware consumer is concerned about more than a good product, they want to know that what they consume is coming from a company with good business practices. When bad news about a company leaks, consumers not only take note, they dig in, investigate themselves, and share with their social networks. After the Uber exec’s comments leaked on Buzzfeed, many users of the app pledged on Twitter to uninstall and tell their friends to uninstall as well. If Uber wants to win back the trust of consumers, they will have to make concerted efforts to show improvement in their company culture.